STAMFORD — Stamford Health, the city’s largest private employer, laid off 20 employees Tuesday as it grapples with a projected $25 million revenue shortfall.

The group that runs Stamford Hospital announced the layoffs Wednesday morning, citing challenges including fewer elective surgeries and inpatient services and problems “unique to Connecticut hospitals.”

Namely, a state hospital tax and a new proposal to allow municipalities to levy property taxes on hospitals.

The Connecticut Hospital Association has been in a bitter battle with Gov. Dannel P. Malloy’s administration over the tax, which would generate $212 million in new revenue for cities and would later be offset by $250 million in supplemental payments.

Though the announcement from Stamford Heath specifically identifies the hospital tax as a factor in its workforce restructuring, Stamford Health Chief Financial Officer Kevin Gage said politics wasn’t the driving force behind the decision to eliminate positions.

“Our financial results are not political,” he said. “It’s the reality of health care today, and we’re adjusting to that.”

The privately owned company said revenue was $5 million less than expected in the first quarter of its fiscal year, which ended Dec. 31. Gage said the existing hospital tax, which has steadily increased since its implementation in 2011, plays into the higher cost of operation.

“The layoffs exist based on the current tax, and if it’s expanded, then that will create additional problems,” he said.

The other factor contributing to lower revenue is one felt nationwide. The rising cost of insurance and deductibles associated with the Affordable Care Act are curbing demand for inpatient services and surgical specialties at Stamford Health — a trend reported by hospitals all over the country.

There has also been a noticeable dip in elective surgeries, Silard said.

Cost savings

Tuesday’s layoffs are part of a larger initiative to offset what Stamford Health projects to be a $25 million revenue shortfall in fiscal year 2017-18. A total of 60 positions were eliminated — 40 of which were vacant — leaving the health group with 20 layoffs and a sum of $6 million in savings.

Other cost-saving measures include renegotiation of contracts with vendors and diminished support to community agencies, Silard said.

The layoffs come less than a year after Stamford Hospital opened its new 13-floor, 650,000-square-foot complex that includes a new emergency room with a pediatric care unit, private patient rooms and highly advanced technology.

“We are growing in areas where we know there is demand in the community and there are opportunities to grow,” Silard said.

Michele Sharp, a Connecticut Hospital Association spokeswoman, said Stamford Heath’s financial struggles are similar to those felt throughout the state.

“This is a time of turbulence in health care nationally, and hospitals are ... confronted by changes that affect both providers and patients,” Sharp wrote in an email. “Here in Connecticut, hospitals pay $556 million each year in taxes — nearly 30 times the corporate tax rate. We’re grateful for Connecticut legislators who are standing up for hospitals. We need them to keep fighting for health care policies that are sustainable ... not more taxes that are just bad policy.”

Severance

The layoffs and eliminated positions were spread throughout Stamford Health, a network that includes 100 affiliate locations in lower Fairfield County, but most were concentrated at Stamford Hospital.

Management positions were targeted in Tuesday’s layoffs and did not affect nurse-to-patient ratios or other important aspects of care, Silard said.

This is the first time Stamford Health has implemented layoffs since 2015, when an increase in the state hospital tax posed a financial threat.

While the layoffs are not ideal, the 20-position elimination Tuesday is a small portion — less than 1 percent — of the hospital’s workforce of almost 2,700. All laid-off employees were given severance packages, which vary based on years of service, and most are given an opportunity to apply for other positions within Stamford Health.

“By taking these painful steps now, we position ourselves to preserve the financial health we need to meet our commitment to maintaining the health of our community,” Brian Grissler, president and CEO of Stamford Health said in a statement. “We regret the impact this will have on our colleagues and we thank our employees, physicians, volunteers, donors, patients and community for their understanding and support.”